Apple stands ready to create a dominance in digital music that reflects MTV's in the music video space - and music labels and Apple's competitors plan to resist this.
Reuters warns that Apple faces strong competing moves in future, but notes that, "every move Apple makes these days results in victory".
As a result, the Cupertino company commands 80 per cent of the MP3 player market and 75 per cent of online music sales.
It appears set for strong sales this Christmas, but its lead may only last a few more months, analysts warn.
Will the Empire crumble?
Piper Jaffray analyst Gene Munster describes a decline in Apple's dominance as "inevitable".
"It's safe to say that nobody can sustain an 80 per cent market share in a consumer electronics business for more than two or three years. It's pretty much impossible," he told Reuters.
Record labels want Apple's digital music star to wane. They don't want to be in thrall to one firm, and believe diversity will drive the emerging industry forward faster than Apple can alone.
Cupertino doesn't listen, executives complain
Music industry executives want Apple to make iPods work with other music services; they want more control on price, and complain at Apple's "stubborn disregard" to suggestions for acquiring more customers.
"It's a monologue with them," one label executive, who asked not to be identified, says. "They pretty much say, 'This is what we want to do,' and if you disagree with them you're an idiot. It's like dealing with a cult."
A new wave of device manufacturers are investing heavily in designing new products with usability and features to compete with Apple's music player. Sony, Creative, Samsung and others are all discussed in the report.
Preparing for battle
Meanwhile, Apple itself has been investing in staff resources to help the company maintain its lead.
"No one assumes Apple will go without a fight," Reuters writes. "It is expected to introduce a video-capable iPod in September and finally unveil its iTunes-compatible mobile phone with Motorola. It is also rumored to be working on a subscription service with the help of a former Xbox Live executive."